Benchmark stock indices ended in the red after a sharp decline late in the day, driven by losses in automobile and consumer-focused stocks.
The S&P BSE Sensex slipped 872.98 points to settle at 81,186.44, while the NSE Nifty50 dropped 261.55 points, ending the day at 24,683.90.
According to Vinod Nair, Head of Research at Geojit Financial Services, investors chose to book profits and tread cautiously amid a lack of strong positive cues and ongoing concerns surrounding U.S. fiscal stability.
“Selling pressure was widespread as participants awaited more clarity on the India-U.S. trade agreement. Given the current premium valuations and delays in the trade deal, we foresee a phase of short-term consolidation, which may lead FIIs to scale back their positions in the domestic market.,” he added.
Markets ended in the red on Tuesday as most index heavyweights saw declines, dragging down the Sensex.
Among the limited gainers, Tata Steel rose 0.73%, while Infosys and ITC registered marginal gains of 0.08% and 0.07%, respectively.
On the flip side, Eternal emerged as the biggest loser on the Sensex, plunging 4.10%. Maruti Suzuki India followed with a loss of 2.76%, while Mahindra & Mahindra fell 2.13%. UltraTech Cement dropped 2.04%, and Power Grid Corporation slipped 2.01%, rounding out the top five laggards of the session.
Broader markets ended lower on Monday, with the Nifty Midcap 100 falling 1.46% and the Nifty Smallcap 100 slipping 0.82%. Volatility also edged up, as the India VIX rose 0.33%, indicating heightened nervousness among investors.
Aditya Gaggar, Director of Progressive Shares, said that a sharp decline in the midcap and smallcap segments added pressure on the Index, which intensified during the second half of the trading session.
All major sectoral indices on the Nifty closed in red.
Nifty Auto led the decline with a sharp fall of 1.96%, followed by Nifty Healthcare Index, which was down 1.27%. Nifty Financial Services 25/50 dropped 1.22%, while Nifty Pharma lost 1.23% and Nifty FMCG declined 1.17%.
Other sectors also faced pressure, with Nifty Private Bank, Nifty PSU Bank, Nifty Metal, Nifty Oil & Gas, Nifty Consumer Durables, and Nifty Realty all closing lower. Additionally, Nifty IT, Nifty Media, and Nifty Bank recorded modest losses, adding to the overall negative market sentiment.
“Market activity in the upcoming session will be crucial in determining whether the trend continues or reverses. The key resistance and support levels are placed at 24,900 and 24,535, respectively,” said Gaggar.